Hello and Happy New Year!
A year ago, I wrote the year-end newsletter after helping a friend patch a leaky roof in a rainstorm. At the time it seemed like the appropriate metaphor to end 2022, which was full of challenges: inflation and a tech meltdown (among other things) contributing to the worst stock market performance since in 2008 and our friends at the Fed furiously trying to patch the leaks by raising rates over and over and over again.
If we were being consistent, I'd be writing this from a warm and sunny beach somewhere. Sadly, this dispatch was not sent from a tropical locale but rest assured that the sun is shining and the weather is near perfection (at least economically speaking for 2023 that is.)
Last December, I wrote about being optimistic that the Fed would manage a soft landing, thus avoiding a recession. Now that the year is over, I can say that my optimism was not misplaced - we avoided a recession and the stock and bond markets were positive across the board!
Overall, we enjoyed a great 2023 from a return standpoint. There were some rough patches and volatility popped in to give a scare a few times, but the overall message was clear - the Fed was able to get our economy and inflation into the Goldilocks zone (not too hot, not too cold.)
On an even brighter note, the current bull market seems to be a global phenomenon as many global stock indices are near 52 week or all-time highs. With the possibility of interest rate cuts being a catalyst, could 2024 be the year of a global bull market? While I am a little less optimistic on the probability of that occurring, all-time highs are usually followed by new all-time highs so perhaps more good news is around the corner!
As we enter 2024, I'll be looking at all the usual suspects: inflation, the Fed, interest rates, employment, earnings, etc. Oh and I think there is a Presidential election in November too! What is guaranteed is that the new year will be full of its own twists and turns. As always, I'll be sure to send updates in The Broadcast so please stay tuned.
Best wishes for a happy, healthy and prosperous 2024!
Until next time, take good care.
Steve